Another EV Startup to File Bankruptcy Taking Millions in Taxpayer Dollars With It

Fisker, a once-promising electric vehicle startup, finds itself on the brink of collapse as it grapples with financial woes and a challenging market landscape. Sources familiar with the matter have revealed that the company has turned to restructuring advisers FTI Consulting and the law firm Davis Polk to guide them through the process of a potential bankruptcy filing.

The news comes as no surprise to those who have been following Fisker’s recent struggles. In a somber regulatory filing last month, the company admitted that it risked running out of cash before the end of the year, casting “substantial doubt” on its ability to continue operations. This stark warning accompanied a disappointing financial report, which laid bare the company’s precarious position: $273 million in sales for the previous year, dwarfed by a staggering $1 billion in debt.

Fisker’s founder and CEO, Henrik Fisker, has been scrambling to secure additional investment and has reportedly been in talks with potential U.S.-based manufacturing partners in an attempt to keep the company afloat.

However, the market’s reaction to the news of Fisker’s hiring of restructuring firms was swift and unforgiving. Shares of the company plummeted more than 46% in after-hours trading on Wednesday, a clear indication of investors’ waning confidence in the startup’s future.

Fisker’s plight is emblematic of the challenges faced by many EV startups that emerged at the beginning of the decade, riding the wave of enthusiasm generated by Tesla’s success.

These companies, many of which made their market debuts through special-purpose acquisition companies (SPACs), have struggled to navigate the complexities of mass manufacturing and adapt to the recent slowdown in demand for electric vehicles.

Compounding Fisker’s troubles is the delayed release of its full financial results for the previous year, which the company attributed to a lack of experienced accounting professionals. This decision has only served to heighten the uncertainty surrounding the startup’s future, as investors and industry observers alike await more concrete information about its financial health.